Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 10863 CHAPTER 3 | ECONOMIC PREPAR ATION FOR RETIREMENT Making Money Last Households have a number of options to help maintain their standard of living in retirement. Products like reverse mortgages and home equity loans allow them to access wealth held in housing equity, and long-term care insurance (LTCI) can help prevent large OOPM expenses. Those who expect to be very long-lived face a greater risk of running out of money before they die, and private annuity products allow them to convert some or all of their wealth into a guaranteed income stream for life. Yet none of these financial products is particularly popular. HRS research shows that the strategy of holding onto assets as a form of self-insurance can make sense for some groups. Other research provides insights into the conditions under which households can expect to benefit from these financial products. Housing equity is a large part of the retire- ment wealth of Americans that is often liquidated when homeowners experience health problems at older ages or need long-term care. Davidoff (2009) explores the relative benefits of annuitization and LTCI for those with more rather than less home equity. For both single and married house- holds over age 62 at the median, nearly 40% of portfolio wealth is home equity. For nearly half of homeowners, home equity is twice as large as non-housing assets. As one indication of the low Housing equity is a large part of the retirement wealth of Americans. FIGURE 3-4a  Total income of single and coupled households by age: 2003 $0 $20,000 $40,000 $60,000 $80,000 $100,000 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+ FIGURE 3-4b  Total wealth of single and coupled households by age: 2003 $0 $150,000 $300,000 $450,000 $600,000 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+ FIGURE 3-4c  Total spending by single and coupled households by age: 2003 $0 $10,000 $20,000 $30,000 $40,000 $50,000 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+ Singles Couples Source: Hurd and Rohwedder (2010b).